Hong Kong bans Pan Sutong from pre-selling Grand Homm flats in Ho Man Tin amid concern over developer’s cash crunch

Hong Kong’s government has banned the real estate magnate Pan Sutong from selling residential property off the drawing plan until its construction is completed, in an unprecedented exercise of its mandate amid concerns over the developer’s cash crunch.

Grand Homm, a luxury apartment project comprising 379 luxury apartments in seven tower blocks in the Ho Man Tin residential area of Kowloon district, had its presale consent cancelled on August 27, according to Lands Department records on September 6.

As many as 28 homes priced between HK$26 million and up to HK$121 million (US$15.6 million) had been sold even while the complex was under construction by Pan’s wholly owned unit Gold Topmont. The developer postponed its completion date to May 29, 2021 from November 30, 2020, due to the late arrival of construction material in Hong Kong, according to sources familiar with the matter.

The ban, the first exercise of the local authority’s mandate since presale consent was granted in 2013, marked an unprecedented step to deter unfinished residential projects from blighting the cityscape. Derelict homes, a common feature of China’s urban landscape in the 1980s and 1990s, have since been mostly cleaned up as the government raised the minimum capital that developers must have to ensure they are able to complete their work and not put any property buyers out of pocket.

Hong Kong’s Lands Department “cannot keep its eyes closed if there is an obvious breach that is unlikely to be rectified in the near future,” said Charles Chan, managing director of Savills Valuation and Professional Services. “I think it’s an individual case, and hopefully there are no other cases in the immediate future. [The government] hasn’t tightened the rules yet.”